The Wolf Of All Streets - Here’s Why You NEED To Buy Bitcoin Before Countries Start Fighting For It | Ryan Condron

Episode Date: April 21, 2024

If you're curious about whether Bitcoin is decentralized, I have some bad news for you. It is not, especially when it comes to Bitcoin mining, which is controlled by a few large miners. Ryan Condron, CEO of Titan and Lumerin, is a pioneer in cryptocurrency and has been advocating for Bitcoin's decentralization and anonymity since 2012. In this episode, you will learn about the concept of decentralization, the potential for major conflicts over Bitcoin initiated by world governments, and why Ryan is so bullish on Bitcoin. Ryan Condron: https://twitter.com/ryankcondron Lumerin: https://lumerin.io/ ►► Sponsored by iTrust Capital Invest in Bitcoin, Crypto Assets & Gold with Your IRA Using iTrust Capital. 👉 https://bit.ly/itrust-scott ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/ ►►OKX SIGN UP FOR AN OKX TRADING ACCOUNT THEN DEPOSIT & TRADE TO UNLOCK MYSTERY BOX REWARDS OF UP TO $60,000! 👉 https://www.okx.com/join/SCOTTMELKER ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. USE CODE ‘25OFF’ FOR 25% OFF WHEN VISITING MY LINK. 👉 https://tradingalpha.io/?via=scottmelker ►►NGRAVE This is the coldest hardware wallet in the world and the only one that I personally use. 👉https://www.ngrave.io/?sca_ref=4531319.pgXuTYJlYd ►►NORD VPN GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets Follow Scott Melker: Twitter: https://twitter.com/scottmelker Web: https://www.thewolfofallstreets.io Spotify: https://spoti.fi/30N5FDe Apple podcast: https://apple.co/3FASB2c #Bitcoin #Crypto #Decentralization Timestamps: 0:00 Intro 1:39 How Ryan started in crypto 3:48 iTrustCapital 4:47 Centralization control 6:48 Bitcoin block production is not decentralized 8:45 Decentralization is a scale 11:00 Decentralized mining 14:43 Government risk 19:12 Bitcoin halving 21:35 Miners’ incentives 24:44 Wall Street & Bitcoin 27:30 The last chance to buy Bitcoin anonymously 29:45 AI & censorship 34:40 AI agents 36:40 Decentralization of AI compute 39:30 Routing system for crypto 41:10 Using existing infrastructure 42:30 Governments are not great 46:00 TikTok case 48:20 Common enemy 50:40 BlackRock’s role 54:34 Wrap up The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

Are we really comparing ourselves to the Chinese communist government? We've made a miracle happen. So I started typing these into chat GBT just to see what this information was. And then I somehow hit this firewall where it refused to give me any more information and kept telling me that I needed to refer to some governmental source. Bitcoin block production is not decentralized. Do you think that most Bitcoiners are A aware of that fact? The proper level of decentralization is where the government doesn't know where to point the gun.

Sounds like it's not decentralized at all. What is going on right now? I can say without hesitation that this was one of the most compelling and important conversations that I've ever had on this podcast. Now, people always say Bitcoin is decentralized. Buy some Bitcoin, protect yourself against the government. But that is a very small step and arguably isn't even true. Because when you dig into Bitcoin mining, who actually controls the network,

it's extremely centralized. The good news is there are things that we can do to help decentralize that network. Ryan Condren, the CEO of Lumarin and Titan, talks about what they're building and how your average person can participate in decentralizing Bitcoin mining and still helping to protect the network.

Once again, you have to listen to this conversation. Let's go. network. Once again, you have to listen to this conversation. You've been in the Bitcoin space, obviously, for a very, very long time. As far as the background, I know very deeply in mining and then moved into sort of decentralized mining, which we'll get in a bit deeper. But maybe you can give us some context as to how you started and what really got you caught, gave you the orange pill moment for Bitcoin. I think it was November of 2012. My co-worker told me about this thing called Bitcoin. And we'd go for these walks on our breaks. We were both working as application developers at a college in Southern California. And he was trying to explain to me the process

of mining. And it just sounded like we were brute forcing this encryption algorithm. I thought we were doing some nefarious acts for a foreign government or something by mining Bitcoin. But we started building GPU rigs, started mining in our garage pretty early on. I quickly realized there were a bunch of other coins to mine. I remember one day he came to me, he's like, dude, I just found out about this coin called Litecoin. He's like, I mined 5,000 of these coins yesterday. He's like, they're only worth a couple pennies, but check this out. So pretty early on, it was a lot of altcoin mining. He launched a site called Coin Wars in early 2013. So we had worked a lot of profitability calculators together on that. We quickly noticed that there weren't a whole lot of mining pools for a lot of these new projects in 2013. So we launched a site called Pool Wars towards the end of the year. We ran

about 80 different mining pools in script and shop. And that's just continued to evolve. We started doing profitability switching on mining. And then in 2017, i co-founded a company called python which was a mining management system at scale that evolved into the titan mining pool which does private mining pools for large miners and then that evolved into a project called lumarin which is a decentralized data routing system with a focus on buying and selling hash power in a decentralized, completely anonymous way. So it's been quite the ride. Crypto investors in the United States face some major challenges. One of them is that there's almost no way to get exposure to the asset class inside of your traditional investment vehicles.

The other thing is the taxes. They are absolutely atrocious. What if I told you there was a way to solve both of these problems? Well, there is. And it's with a self-directed IRA from iTrust Capital. Guys, not only can you open a new self-directed IRA and fund it with the limits each year, but you can actually convert over from your 401k, your Roth IRA, any other IRA that you already have, and you can do that tax-free just transferring over the balance and then you can go to cash buy as much Bitcoin and you want and not pay taxes when you sell it you absolutely have to try this if you are in the United States use the link down below it's bit.ly slash I trust dash Scott

that's bit.ly slash ITR UST dash t t you have to try this now so it's really an interesting evolution but clearly each step of the way when i listened to you talk about it you identified something that was lacking in the way that things were being done and sort of moved forward to fix that problem it sounds like you've maybe gotten to the final boss here which is you know there's no access to everyone everywhere to mining and you've effectively created a way that people can access and trade and buy that hash rate and mine themselves with all without access to all of the equipment and infrastructure that normally would be needed to participate. Is that an accurate assessment? Yeah, that's correct.

We identified this issue that we call essentially the centralization control. Because a lot of people get two different words mixed up. They get decentralized and distributed mixed up. A lot of times I'll talk about distributed systems, we'll talk about decentralized systems, but they're very different. Distributed system is just geographically distributed. distributed systems, we'll talk about decentralized systems, but they're very, very different. So a distributed system is just geographically distributed.

Decentralized has everything to do with who has control of those systems. So most miners, the large miners, even though they might be distributed, they'll have several sites. They are very much centralized because it's one company controlling a large amount of hash power. This has been the ongoing issue with Bitcoin is right now we have about four Bitcoin pools that are really relevant. The top two of the four actually produce about 70 to 75 percent of the blocks. So in reality, I think it's something like the top four produce over 93 or 94 percent of the blocks.

So that means there's four entities on Earth that are responsible for over 94% of the block production on Bitcoin. That's not very decentralized. So we needed to find a way to decentralize control. So that was the original paper I wrote in 2017, was the decentralization of control, where we're essentially decoupling the creation of hash power

from the control of hash power. And that's where the Lumumeran project came from. So you would say that Bitcoin is not, in fact, decentralized. Or perhaps you would say that Bitcoin mining is not decentralized. Maybe those are two different things. Bitcoin block production is not decentralized. And Bitcoin mining is becoming more and more centralized just around the basic economics of cheap electricity, stable government, and good infrastructure. So unfortunately, this is just the way things happen when you need greater efficiency, greater

optimization, they do become more and more centralized. So we had to find a way to keep Bitcoin decentralized, to keep Bitcoin democratized, if you will. And that was sell off the hash power. Do you think that most Bitcoiners are A, aware of that fact, or B, even if they are aware of that fact, willing to admit it? So in this space, a couple of truths will very quickly come to the surface. And one is most people really don't care about the underlying tech or how it works or if it is truly decentralized. Most people in the space just want to see token go up and they want to know wherever they put their money. They got 10x, 20x, 100x.

When you start getting into the nitty-gritty of how the actual tech works, most people's eyes glaze over. So when it comes to decentralization, if you start talking about how many Ethereum full nodes actually exist in the world, and then you start discussing how many of those Ethereum nodes actually exist on AWS world. And then you start discussing how many of those Ethereum nodes

actually exist on AWS versus external server hosts, or how many Bitcoin nodes actually exist on AWS versus external hosts, how many block creators there are. This ecosystem is not as decentralized as we would think it would be at this level of value. Sounds like it's not decentralized at all, but it sounds like we should not define decentralization as an absolute. Perhaps it's a sliding scale and you want to be closer and closer to one side of it.

But frankly, the way that the Internet and servers and such exist, as you said, it's almost impossible. I mean, what percentage of cloud storage and the internet is powered by AWS, right? Which is highly centralized. So, no, you're spot on. So it is really a scale. Decentralization is not a yes or no, it's just how much. And the more a system grows in value, the more need for it to be decentralized. Simply put, as Bitcoin became

more and more valuable, it had a larger and larger target on it. So as the target gets bigger, you want to make sure it's decentralized enough to withstand anyone trying to control it or manipulate it or bring down the system. So in some systems that aren't that valuable, you know, one or two people is plenty of decentralized. But as the system becomes, you know, billions, if not trillions of dollars, then you need thousands, tens of thousands, hundreds of thousands of people involved in order to keep the system safe. I often say that the proper level of decentralization is where the government doesn't know where to point the gun. So that's really what we're protecting against. Funny enough, we're seeing that more and more in the AI industry right now, where these models are getting very, very powerful. Governments are sitting up a little bit straighter.

They're paying attention. They're wanting to figure out how to regulate this, how to control it, how to block certain types of data, certain types of compute. We're looking at greater amounts of censorship around AI. And what we've essentially built with Lumarin is freedom of access. It's peer-to-peer socket routing on smart contracts. And because of that, what we've built for half power can be retooled and applied towards AI compute, which is exactly what we're doing with the project of Morpheus right now. Okay, a lot to unpack and so many directions that I want to go. So first, I want to talk about how you decentralize Bitcoin mining and hash power first, right? Because I think that's the first step in making Bitcoin more decentralized.

And that's your first effort. Then I want to dive deeply into the AI side of it because there's so much to discuss there. Yeah, absolutely. So for the half power side, it used to be said that one hash equals one vote, and you would vote with your compute power. So originally, the plan was you would have your CPUs, you'd have your computers that were mining against Bitcoin Core, and you would mine blocks. As people got more and more CPUs, they realized they needed to pool their compute resources, and that's when mining pools started coming about. Then the pattern started moving into GPUs to get faster and faster

SHA hashing. That moved into ASICs, and now you have very specialized hardware and warehouses all around the world stuffed to the rafters, essentially, with these little toasters that will run on megawatts, if not close to a gigawatt of electricity, to secure the Bitcoin network. At scale, it's always better to optimize at scale with a centralized system. So you have publicly traded companies now that are raising huge amounts of money to have huge mining farms. But those are all very, very centralized, right?

They're essentially a utility creating a product known as half power, and they're using their own product to create Bitcoin. Now, for a publicly traded company or a utility, that seems like a very odd model. So what we're proposing is that these utilities known as miners sell off the product that they're trading, hash power, on an open market or a global hash power grid, if you will.

And the purchasers of those hashes essentially can vote with them. And the way they'll vote is they'll send it to a mining pool of their choice. And the way they'll vote is they'll send it to a mining pool of their choice. And what we personally believe is if you bring more decision makers into the process, then the top four mining pools will start losing majority share and it'll start getting distributed among more national level pools, more municipal level pools. I really do believe that a lot of nation states actually are going to get involved in mining in the near future. And they're probably

each going to be running their own pool. So you might have in the next five years more of a patriotism around backing a mining pool, which would be greater decentralization in space than what we currently have. Is there a number that you can put on it? How many individual miners would have to be purchasing hash power from the miners to create enough differentiation from the four pools to make them less dominant? Is this millions of people would have to do it? Is it, you know, I'm just trying to get an idea. Yeah. The more the better. A good place to start would be getting the large publicly traded miners to sell off their hash power as utility. Then that's step one.

And step two is who buys that hash power and where do they send it to mint blocks on the network? And then step three is creating new mining pools for new options. So it's a process. And getting through step one is hard enough at this point. Getting the miners to sell off their hash power into the future has been difficult enough as it is. I loved your statement that decentralization is effectively making the government not know where to point their gun, right?

Can they point their gun at the four major mining pools right now? Oh, absolutely. And to cause extreme disruption, they only have to point their gun at one mining pool. Foundry here in the US is under a huge amount of scrutiny. They're essentially the counterpart to Coinbase. If you look at how much scrutiny Coinbase is under for being a very, very large player in the space at the exchange level, Foundry is just biding their time because it's going to

come. The Department of Energy, the SEC, they will be knocking on Foundry's door most likely in the near future. I don't think the government can shut them down. Maybe I'm wrong, or at least maybe it would take long enough and the power would distribute. Much like when we saw China, quote unquote, shut down. We saw this massive dip in hash rate. Apparently, Bitcoin was dead, if you guys recall. And then it took a matter of months to a year. And all of a sudden, of course, that hash rate was moved or replaced in other places because that's the beauty of the Bitcoin network. But would we see something like that if Foundry went down? They got a cease and desist from the government.

We're told they weren't allowed to operate. What would happen? I mean, if Foundry went down, you'd very quickly see the hash rate disperse to other locations. But there's really not a whole lot of other locations the hash rate can really be dispersed to at this point. There are pools, but they charge a substantially higher fee than Foundry. So you'd see all these publicly traded companies immediately have a huge hit to their revenue. I don't think the US government would ever require Foundry to shut down, but what they might require them to do is say, hey, here's a list of Bitcoin addresses.

You are not allowed to process transactions over those addresses. And now you have 40% of the network or 30% of the network censoring transactions. And if the Chinese government did the same exact thing with Antpool, now you have 70% to 75% of the network ignoring certain addresses. And now if you did the same thing to F2Pool and BinancePool, now you have over 94% of the network ignoring addresses. So that's really the danger is if you get targeted on one of these lists, it's only four entities that are required to actually censor. Right. But people say that a 51% attack on Bitcoin is impossible. There would be no way to shut down the network. That sounds even quieter and more nefarious than a 51% attack in a lot of ways because it can be done very easily. And then it becomes down to a few decision makers who want to decide whether they continue to exist to make money or to do what's quote unquote better for Bitcoin, right? So you end up going to these centralized people who probably have an incentive to cooperate with the government because they want to keep making money. Yeah. Well, and here's the problem is when we apply our gun principle, because I do believe in two things in life is the proper level of decentralization is when the government doesn't

know where to point the gun. And the second is he who has the most guns wins. So if someone knocks on your door and they have more guns than you, chances are you will lose. And that's the problem with the mining pools right now is chances are their security is not a level of physical security for their servers or their operators. I was asked several years ago to paint a picture of where I thought Bitcoin mining could be 50 years in the future. And that was a dangerous question to ask me on stage. And I painted a very geopolitical mining situation where governments would literally protect their mining facilities as national interests where mining facilities would be essentially military bases where national uh espionage would happen around trying to knock other nations mining facilities offline if Bitcoin truly is at scale a root of value for the internet a root of value for the world then governments have

a huge interest in being the power of that value. So a lot of warfare might take place around mining facilities in the next decade or so. But that's me envisioning where this could all go. Right, but you have a better understanding than this than most pundits who are just sort of giving their theoretical ideas. You're participating in it every single day and you understand it. I think those are realistic possibilities and not just tinfoil hat or fear mongering, right?

And listen, as this comes out, we're going to have just passed the halving. So we're coming into this fundamental, very important event that happens every four years in Bitcoin, but the halving also is going to probably wash out quite a few of miners, right? So could this lead to even further centralization? We talk about the halving as this amazing thing. And I think it is for obviously it being a deflationary asset,

for being a hedge against inflation and against the government and money printing and all of these things. But the halving is definitely going to, you know, send more of that hash power to the haves, and there's going to be a lot of have-nots. The reality is that the metaphor I often apply to the halving when it comes to mining is the two hikers in the woods that come across the bear. The first hiker bends down

and starts putting on running shoes, and the second hiker says, "'What are you doing? You'll never run out the bear. Outrun the bear.'" And the first hiker looks up and simply says, I don't have to outrun the bear. All I have to do is outrun you. And that's exactly what we're going to see with Bitcoin difficulty levels past the happening is any miner that does not have a proper capital to weather the storm where profitability is essentially through the floor,

they will go under and they will sell out all their assets to the larger miners that have the capital and have the resources stored up beforehand. We're able to retool their own rigs and raise money beforehand. And we'll most likely see a lot of these miners dropping off three, four months after the halving. They might make it through the summer, but come September or October, we're going to probably start seeing a lot of acquisitions by Mara, Core, Hive, a lot of the big players, Riot. They'll most likely start swooping in

and taking up all these assets. So the top 10 miners will most likely just double down, secure more hash power. And then the next cycle, we'll start seeing small miners raising funds again, trying to do it all over again. And then another four years, we're going to see the same exact thing. So getting a foot in the door with the larger miners now to get them to sell off their hash power and decentralize it now is very, very key because they're not getting any smaller and they're not going away anytime soon. More centralization. And so the question is then, what is the incentive of a bigger miner

to be a good actor over, let's say, the next six months for the network, because I have proposed a theory. I said it on Twitter spaces and got eviscerated by hardcore toxic Bitcoin maxis. And this is what I said with my minimal understanding of mining, but after digging in pretty deeply with a few guests. We have this situation now where we really have have and have nots. As I said, there's people who will be profitable with Bitcoins at 20,000, and there are people who probably need it to be 80,000 or 90,000 to be profitable. And we're talking about even publicly traded miners based on how much runway they have, how much cash they have on hand, if they own or are renting their facilities, a million factors. Why wouldn't the ones who can afford much lower Bitcoin and remain profitable sell their Bitcoin off massively and consistently for the next four to six months to make sure that they destroy their competition? Yeah, to try to keep the price down.

So interestingly enough, we just assume all these miners have a huge amount of Bitcoin sitting there. And that's unfortunately not always the case. A lot of these miners have to liquidate the Bitcoin the moment they get it, whether by court order in some miners' issues and other miners just to pay their electricity bill and OPEX. So I ran a calculation last year. I think it was March of last year. I put it out on Twitter. And I said, at a stable difficulty increase, like a moderate difficulty increase, I said, by the end of March 2024, the price of Bitcoin would have to be $67,500 in order for miners' profitability to maintain after that. So I did the calculation a year ago. You could do that calculation three years from

now, five years from now. It's basically just looking at a steady rate of difficulty increase and looking to see what minor profitability has to be because miners will mine if it's profitable and they'll turn off their miners if it's not profitable. So it was a pretty safe calculation to hit 67,000 by the end of March 2024. Now, we exceeded that. Barely. Barely. But then I started hearing some numbers coming from some of the larger miners and hearing that their break-even point after the happening was going to be around 67,000, 64,000, 65,000. So that's just a break-even with their their op ex. Now, if they're a

for profit company, they want way more than that. So it's really going to be this balancing act of if they don't have to sell their Bitcoin because they're able to raise enough money to weather the storm. You're right. There could be a mentality of price control of how much do we sell off? How do we how much do we hold? You know, how much do we hold uh you know how long do we hold for so there's a lot of strategy there uh i think we're still decentralized enough with how many large miners we have where it shouldn't greatly manipulate the market for this cycle but in four years from now this could be a huge concern. Talk about the centralization, obviously, of mining. There are people who have spoken out against the herd, concerned with Wall Street's entrance into the space and future control of Bitcoin as well.

Obviously, the Bitcoin spot ETFs have been massively bullish for price. And I think most people view them as a net positive. But is there a concerning or more nefarious side to Wall Street's entrance into Bitcoin? I mean, BlackRock is going to own 10, 15, 20% of the Bitcoin in a year, probably, maybe in two years, right? The numbers are absolutely massive. When you look at what they're doing, they're going to surpass Grayscale within probably a month. Is that a concern or is it... I mean, they don't truly own it, for the record, the people who buy the ETFs, but you get the picture. Yeah. So what's interesting about this is anytime you have a system of great value, you're going to have those that seek power over that system. Bitcoin was inherently designed to keep people from controlling it by having a distributed

system and a decentralized system around proof of work. Proof of stake systems are way easier to control than proof of work systems because there's an inherent limit on electricity in any one given area. What people don't realize is not only has BlackRock purchased a huge amount of Bitcoin for an ETF, but they also own a large chunk of one of the world's largest miners. So they are positioning themselves to not only control the asset in a large tranche, but they're also positioning themselves to be able to move that asset and transact that asset, which is incredibly smart. Because what people forget is just because you own Bitcoin does not mean you control

the Bitcoin network in any way. So you could own 99% of all the Bitcoin in existence and still not be able to send it on the network unless a miner processes your transaction. So BlackRock is probably one of the smartest players in the space from what I've seen is because not only have they acquired a huge amount of Bitcoin for their ETF, but they're also acquiring a huge amount of half power to ensure that they can actually transact that Bitcoin.

Any other institution that has not done that is potentially susceptible to control and censorship in the future. Finality has been mining since 2014, 15, 16, or at least has been superficially engaged in it. Is that factually incorrect? No, no, that's true. superficially engaged in it. Is that factually incorrect? No, no, that's true. They were one of the earliest adopters in space.

It's going to be interesting times moving forward, but lots of gatekeeping happening. And this is a scary thing, is if you want to acquire Bitcoin in any significant amount, you're going to have to go through a process called KYC AML. It used to be that anyone that had Bitcoin miners could acquire Bitcoin completely anonymously.

If you want to buy Bitcoin miners, the specialized hardware ASICs, you have to go through the same process, KYC AML. So every single significant on-ramp into Bitcoin is gatekept now. So there used to be this thing called local Bitcoins, where people could literally just meet in the park and transact Bitcoin because there's really no easier way to do it. It's getting to a point now where actually getting your hands on a large amount of Bitcoin anonymously is very, very difficult, if not impossible. So having a HatchMire marketplace that's completely decentralized and anonymous may be one of the last ways to do it.

So it sounds like what you've built beyond being a viable business is actually almost a moral imperative for people who believe in the decentralization of the network. And those who are looking to participate in mining would help the network more by doing it through a Lumarin or something similar because it's actually decentralized than they would by trying to buy ASICs, plug them in and actually mine directly. Exactly. And it gives them better stability as well. So then if someone wants to

purchase ASIC and plug it in their apartment and understand how the tech works, that's great. If you want to run some ASICs in the basement of your house and warm up your house during winter, awesome. Is that going to compete with the large centralized miners? It won't even be a drop in the bucket. So the real key is getting large centralized miners to really take a position as a utility, sell off the hash power to people that want to actually participate in the network and distribute the control. So beyond that, we dug in pretty deep to Bitcoin and could probably do this for three more hours. But I want to also go to the AI side of what you touched on before and Morpheus. Interestingly, just anecdotally, I've seen the government and mass media starting to attack AI with the same narratives that we heard for years about Bitcoin. I've seen articles that AI will use more electricity than entire countries. Sounds familiar, right?

And that it's, you know, we get it, right? Everything you've ever heard said about Bitcoin negatively, now they've moved on to AI. Yeah. Yeah, it used to be Bitcoin's boiling the oceans. And next thing you know, it's going to be AI is boiling the oceans. It's good to know that they have a common playbook. The censorship of AI is a greater problem than I would even say that censorship of Bitcoin is. When it comes to AI, it's actual human knowledge. It's what is truth in our society. And we know about political propaganda. We know about governments trying to control information.

The Chinese government is notorious for this. The U.S. government is actually notorious for this as well. But it's just less talked about in our actual borders. Now, when you actually apply this to a content creation system that everyone's expecting to get accurate information from, it becomes a very easy centralized point to control what people know, what information they can access. I can be a great example of this.

I was working on an op-ed article about carbon emissions with Bitcoin miners, really just wondering if every single Bitcoin miner on earth with zero carbon emissions, would it even matter? What are the carbon emissions like for other countries, with other industries? So I started typing these into chat GPT just to see what this information was. And at first, chat GPT started answering me, giving me carbon emissions information for the past year. And it gave me information, maybe for like two or three prompts. And then I somehow hit this firewall where it refused to give me any more information and kept telling me that I needed to refer to some governmental source. So no matter how I tried to ask it, no matter what was the Chinese emissions

for 2022, what was Indian emissions for 2021, it did not matter. It kept trying to get me to go to a government-controlled website to get the information. And I'm like, wait a minute, if climate change is such a big deal, wouldn't they want this information to be public? Wouldn't they want everyone to have this information? Why are they trying to keep the information to send me to a centralized source that has every interest to make that information manipulated? That's terrifying, especially because I forget even you say like, why wouldn't they want that to be this way?

Shouldn't they want it to be public? We shouldn't have to ask those questions anyway. It shouldn't matter what they want. We should be getting accurate information when we search for it. Period. Yeah. And that's why decentralized assets, decentralized currency is incredibly important to be able to control and own your own assets.

Decentralized information, decentralized AI, decentralized compute is really going to be the next frontier of human sovereignty that's under attack right now. So what we built with Lubrin was a freedom of access to Bitcoin hash power through a peer-to-peer routing system that takes us routes from smart contracts. When I came across the Morpheus project, I quickly realized that you need the same type of pattern. So we've actually been working with the Lumeran team to build out the Morpheus core node in order to create access to decentralized AI systems so that anyone anywhere in the world can anonymously work against an unsensored ai model and they don't have to worry about chat

gpt or google or apple or any of these other centralized big data systems controlling what is truth is this wallet to wallet direct peer-to-peer transaction of information, effectively? Yeah. It's completely encrypted between two different nodes on the network. They get connected through a centralized routing system on one of the decentralized networks. So I guess it's not a centralized routing system. It's a common smart contract that they'll connect through. But they operate through essentially a DEX on Arbitrum, and the nodes interact with each other, completely encrypted, completely anonymous. It sounds like this is about much more than information or whether we get correct information or access to information, the real use cases that

we've heard about AI that are perhaps the most compelling going forward are agents, right? We see people building these agents all the time. Years ago, I talked to Humayun Shaikh from Fetch. The CEO of Fetch, Bitcoin Fetch, has gone obviously absolutely nuts over the past few years. And he was the first who really explained it to me in a way I understood. The traffic light could be an AI that's talking to your car that's an AI, which is talking to an advertisement on the road that's an AI. And everything effectively has its own agent. And you need systems for those agents to talk to one another.

But there's a huge threat of those systems being massively centralized and controlling almost everything that you do once AI becomes more prevalent. Is that correct? Yeah, this vision for the future can either be incredibly cool or incredibly terrifying, depending on how you look at it and the perspective you have of it. I often refer to AI agents as a spider. And different spiders have different utilities. They operate in different ways. But at the end of the day, if you have a spider sitting on a table,

it's not going to move very quickly or efficiently. It's just kind of there. But as soon as you build a web and you let the spider on the web, now you'll see it navigate very, very differently. So what we envision AI agents to be are essentially these spiders. And what we envision Morpheus to be is the web that they can crawl across. So it's the connections to all the different blockchains. It's the connections to all the different LLM models.

It's connections to different compute providers all around the world that allow completely anonymous, completely decentralized interfacing with each other so that when you deploy an AI agent spider, it can access every blockchain, every LLM, every compute provider it needs to access in order to fulfill its objective. It sounds like a major use case similar to Lumarin because of the threat of centralization of hash power is a threat of centralization of AI compute because that's becoming the

next new narrative, right? Is it going to have these massive centralized services or organizations that control all of this huge amount of compute that's required to operate this AI. So is that also a potential future use case here to decentralize that compute in the same way that you would envision decentralizing this hash rate? Yeah. And that's a big part of what Morpheus is providing is its compute providers will run a Morpheus node and they'll offer a series of models on that node and anyone else anywhere in the world can anonymously attach to that node and run prompts against it.

The key thing is it's anonymous and it's completely decentralized. Anytime you start taking on these systems and you move it into a non-anonymous way, now it puts people at risk to interact with it if the system is, you know, I guess, had information that a government doesn't want you to have, or it has some type of sensitive data on it. At the end of the day, what we've built is a data routing system on top of Web3 smart contracts. And it really equates to freedom of access. So whether it be access to hash power, access to AI models, access to telecommunications, it could really be anything.

You know, I've seen people get their SIM cards stolen. I've seen people get their social media accounts shut down. You know, I've seen people's free speech greatly hindered by regulatory authorities that deem that this person should not have this way of communicating to people. We see this throughout the world where people aren't as free as we think they are, or we aren't as sovereign as we'd like to be. And the vision of Lumarin and where we want to move the ecosystem with AI and cryptocurrency in general is to make sure that it is censorship resistant, that there is freedom of access. And it doesn't matter what government, what entity, what organization wants to try to silence you, it won't be able to do so. I didn't really think about the social media side of it and all of these other sort of applications. Are those future things that by participating

in a network like this that's more decentralized could actually be prevented or protected where you could protect yourself using this same sort of system. Like, does this, we always, you know, Bitcoin fixes this is kind of the meme. Now, if we say Morpheus or Lumarin, or at least systems like this, fix this. Yes. And no, because it's not a fix-all system. It's a routing pattern. And it's a way of connecting systems peer-to-peer through smart contracts. And we can apply that routing pattern to hash power or AI compute. We can really apply that routing pattern to anything.

There is still a susceptible layer of our connectivity when it comes to cell powers, when it comes to satellites. There will always be a centralization issue around the way our data propagates. Eventually, governments will resort to greater control of those areas when they realize that they can't shut down the stream of data on the decentralized networks themselves. So that's where things like Helium are really interesting. If that project ever comes to fruition, any type of peer-to-peer data transfer, any type of mesh networking, that would be the next frontier for Freedom once the government realizes that they can't censor or control access to these networks. Helium has a pretty wide network all over the world. I have friends locally who pay people to put the, or at least in the last cycle, pay people to put the little Bobcat routers on top of people's houses and such. And we've seen

Helium actually, I believe, open in Miami and they have tens of thousands of customers who are using it. So that is sort of a leader, I guess, in this deep in sort of narrative. Can those same systems that are already built for something like a Helium be used for other purposes because it's already somewhat distributed and decentralized? centralized yeah once you have the mesh network up yeah that i believe that was the the original vision for things like helium you know i've even come across projects where it was like open source satellites where it was small data transmitters that they'd launch up into orbit simply to be free open source data transmission to make sure that no government could fully shut down data transmission out of a country. That's cool.

At the end of the day, we're trying to build an ecosystem and an infrastructure that gets ahead of control. Every government at some point in history has tended towards more and more control. Every government at some point in history has tended towards more and more control. I don't know of a single government that's actually tended towards less control. So if we get ahead of it now, then it will foresee human sovereignty into the future. That was actually my next question before you even said that, which is, can this evolve and gain enough adoption fast enough to get ahead of what's inevitably coming? Whether we believe that's actually nefarious by the

government or not. I truly believe that there's plenty of people in government who just think we need to be protected. It's like a public good in some way. There's obviously the more evil side to it. But either way, we know that more control, more regulation, more attempts to shut things down are coming. That's just the evolution and the direction that these things always go. Yeah. Governments protecting people is a great thing and a scary thing at the same time, because it's up to the definition of that said authority of what protection is and what they get to protect you from. And if they think that they need to protect you from yourself, then that starts verging on some very dangerous things, right? And that's what we've seen more and more in the US government, where you have to be aredited investor. That's a perfect example of the

government trying to protect you from yourself. You are too dumb to handle your own money if your net worth is under a certain amount. Therefore, we are going to block you from certain deals because we don't want you to put too much on the line for risk. You can play the lottery, which by the way is at record highs, but you can play the lottery and go to a casino, but you can't invest in your friend's VC because you're $10 under a limit. Yep, yep.

When you really start looking at these systems, and I tweeted about this earlier today, once you start realizing that the government that we live under was actually, and the laws that they propagate were actually created by people about our age that were of average intelligence, it kind of takes the blinders off. You realize that the systems in place really are not that great. And a lot of the systems are just downright awful. A lot of them

were created by people that didn't know what they were doing or that wanted to ensure their own self-interest in the system. They were not developed or architected or thought out correctly. And now we have 200 years, at least in the United States, we have 200 years of iteration on this type of thinking by people our age. You know, they're not, this government is not better than what we should create. This government is not better than the things we could come up with. It is not sovereign. It's not a deity, if you will. It is very, very flawed. And when we say that we have a government by the people, for the people, of the people, or all this nonsense, and yet most of the people don't even like it, then what's that saying about it? Because it's there to protect us?

You know, it's actually mind-boggling that we have found ourselves in such a controlled state at this point. And we do very little to stop it. And honestly, if we started trying to stop it, we'd probably find out that we have very little power to stop it at this point. I agree. And I think most people who say they care, then type something into Google in their iPhone with their face ID and don't really care about privacy or decentralization or any of those things. I think most people choose convenience and speed over any of these things, which has kind of been a problem because most of the private decentralized systems aren't as fast or cheap, right? And so that just

almost eliminates their adoption. You want to see something interesting. It's just like watch the congressional hearings about TikTok, where you have all these senators and congressmen getting up in front of each other, talking about how amazing TikTok is over in China and how educational it is over in China. And here in America, it's just a spy tool and it's not any good. And I'm sitting there scratching my head going, wait, are we really comparing ourselves to the Chinese communist government and what they're propagating on their people as though that's what we should be, you know, that's what we should be going for. I'm just like, what, what is going on right now? Like, how, how is this the standard that we've set for ourselves is a society that enslaves their people or eliminates the people that don't, you know, fall in line is somehow a society that we want to copy. It's honestly a terrifying mindset. And then when they

pass legislation and laws based on this mindset, and now we have private companies having to be sold off to other owners and other companies being labeled as a monopoly. And when you really look into why, it's probably because under the covers, the government couldn't actually get control the way they wanted to. So they're going to force the company to change something so the government can actually get a foothold. Everything you just said comes out of Elizabeth Warren's mouth. Right. It's unbelievable. I hate to even go there, but every time I hear someone railing about monopolies or something getting too big or anti-crypto army, anti-technology,

it's always her. And I do not do politics, guys. I've said a million times, I'm registered as unaffiliated, not even independent. I'm unaffiliated. I can vote, but it always comes out of a few people's mouths. There's a general strategy for controlling a large group of people, and it has to do with having a common enemy. If you can identify a common enemy, you can manipulate a large group of people to focus on that enemy rather than focus on what's happening. We saw this with COVID and droves where, hey, we're all in this together. Just look at all the propaganda that came out around COVID. Meanwhile, one of the largest shifts in wealth in history happened during that time. One of the largest overreaches in governmental authority happened at that time. Just so many things happened behind the scenes. And the government

was too busy pushing a propaganda of, we're all in this together. This is our common enemy. And this is what you see with politicians over and over and over. This is what you see with organizations or entities at scale, is they can identify a common enemy to mobilize a people group, then they can control them. And we're going to see this again. We're going to see either an economic common enemy, we're going to see another global pandemic. But when you look at the bond market and you look at where our fiscal policy is, when you look at the bond market and you look at where our fiscal policy is, when you look at the Chinese economy right now, they are in need of a global enemy, a global common enemy. And wherever they can find it, they're going to go for it,

whether it be Bitcoin, whether it be a decentralized AI, whatever they need to get people to move in the direction they need them to move in, it's coming. And whatever excuse they have when you talk about it like that to turn on the printer and try to massively

inflate away or print away that debt. Or rebase the currency. Right. It's interesting because there's so many problems in the world. Bitcoiners will be the first to tell you that probably the biggest one is unsustainable fiscal policy. As much as all of these things are major issues and should be discussed, but adding a trillion dollars to the debt every hundred days while talking about how incredible the economy is is the misdirection that you're talking about right now and all they need is that common enemy to start

the stimulus and fire it up again and just keep on printing it always comes back to the money at the end of the day so if I could say anything for investing in Bitcoin right now is one, you look at the amount of debt the US has with USD. So I would not hold USD in any large amount for sure. The second thing about investing in Bitcoin right now or holding Bitcoin, if I were to do an infomercial for it, would be BlackRock doesn't lose. And if BlackRock is putting a huge amount of money in Bitcoin, then chances are the US government's not going to mess with it.

So those would be the two main things. Other cryptocurrencies, that's another story. That's my favorite joke. You know, they say there's three branches of the US government, the executive, legislative, and judicial, but they never tell you about the fourth branch, which is BlackRock. There you go. That's exactly right. Which may be the most powerful. And I think that they just hit $10.5 or $11 trillion in assets under management very, very recently. And that has increased from seven or eight only a year, a couple of years ago. So BlackRock also

decentralize centralizing power and money massively makes me a little hesitant. I really do believe that Larry Fink has been orange pilled when I hear stories about it and the way he talks, it could be just, you know, some powerful narrative, but the way he talks, I really do think he believes in it. But I also think that it's just a major power move and control. It's both. Yeah. So we have a company with $10 trillion of assets under management. We have another company trying to raise $7 trillion in a fund raise.

We have some pretty exciting times ahead of us here. There's some tech that exists in this world that we don't even know about that is worth $7 trillion. It's going to be interesting to see what the next five years look like. I was one of the first people railing against WorldCoin and saying, you're not going to scan my eyeball, but I have to admit, I once again, also stare into my iPhone and open it with my face. You're already in the system.

I think my eyeballs have gone to worse people than probably whoever Sam Altman is working with. Unfortunately, honestly, man, when we have this conversation, it confirms a lot of things that I believe. I think that it's really important for people to go beyond the surface of, buy Bitcoin, you'll be safe. I mean, there's a lot more deeper issues here at play. And I really do believe that people have to come together, not even for financial gain, to use systems like your building, whether it's yours or others or whatever way they can find to increase their privacy

or participate in these decentralized systems. That little part can really help to crush this centralization of everything that we're seeing. Yeah. I have to take a step back and really kind of analyze what I've done with my life and where I want to go and what do I want to leave behind. Because the reality is,

in about 100 years from now, I probably won't even be a picture on somebody's wall. No one's going to know what my name was. If I wrote a book, no one's going to read it anymore. There's very little I could do to leave a legacy. But I thought about if I could do anything, it would be to start a system that would allow others to build on top of freedom of access and allow others to have the ability to maintain sovereignty in data systems. And whether that be access to Bitcoin hash power, whether that be access to AI compute. If I could at least start some type of railway that can't be shut down, that can't propagate data, then hey, at least I've left something for my kids. I absolutely love that. I'm kind of pissed off that we're at time, to be quite honest.

But can we just do this again more regularly? Yeah, let's do it. We got really one of my favorite conversations that I've had. Where can people follow you? And more importantly, check out Lumarin and Morpheus and everything that you guys are building and start to participate. Yeah, Lumarin is at Lumarin.io, L-U-M-A-R-I-N.io. Morpheus is a lot easier.

It's more.org. You can follow me on Twitter. Just look up Hello Lumarin and you'll find me. But yeah, join the community. Help us out. Yeah. When we talked privately, obviously, I told you how much I love Matthew Rozak, who is your partner.

And you said, man, did you get me, Matthew, and Jeff Garzik, another one of my favorites, talking? We can go for six or eight hours. I can see that. Because I could have done this for a much longer time. And I can't wait for our next conversations. I really enjoyed it. Thank you so much for taking the time. Yeah, thanks for having me on Scott, it's been good. Let's go.